Pennsylvania Intellectual Property Forum:
Advocacy and Lobbying
Change on a grand scale is sweeping through the U.S.
patent system. In response to a surge in patent applications
over the last fifteen years, the U.S. Patent and Trademark Office
(PTO) is trying to improve the quality of issued patents and to
reduce the time required to process applications. The changes
to PTO regulations are occurring at such a furious pace that the
interests of small business are in danger of being trampled.
In addition, Industrial titans are battling over the soul of the U.S. patent system. In one corner is the pharmaceutical industry, which is dependent upon a strong patent system to protect immensely expensive and immensely profitable drugs. In the other corner is the high technology industry, which make and sell highly complex products that may contain tens of thousands of systems and hence tens of thousands of opportunities to infringe someone else’s patent. The high technology industry, in general, supports a relatively weak patent system that does not stand in the way of selling high-technology products. Each of these industries has its advocates in the PTO, in Congress, and in whatever administration is in power.
Small Business and Individual Inventors are Crucial to American
Industry
The interests of the small business and the individual
inventor are not a concern to the major players in either the
pharmaceutical industry or the high technology industry. In
the battle raging between these major industries, the PTO, the
Congress and whatever administration is in power are more than
willing to run roughshod over the interests of the small business
and individual inventor.
Ignoring the interests of individual inventors and small
businesses is a serious error. Historically, individual and
small business inventors have provided more than 30% of U.S. patents
and have driven innovation in the United States. Many large
companies owe their competitive advantages to patents acquired from
small businesses and individuals.
Our Mission: looking out for the little guy.
Large businesses have many lobbyists and organizations
looking out for their interests before Congress and the PTO.
Individual inventors and small businesses have few advocates in the
area of patents. As operators of small businesses and as
attorneys who represent small businesses, we have attempted to carry
some of that burden.
The Problem: PTO fails to consider or disclose the effect
of proposed statutes and rules on individual inventors and small
businesses.
Certainly no one is looking out for the interests of the
individual inventor or small business at the PTO. The PTO has
taken steps to promulgate rules that will significantly increase the
cost and severely affect the ability of individual inventors and
small businesses to obtain patent protection. In so doing, the
PTO has made several poor policy choices and ignored the
requirements of federal statutes requiring the PTO to assess the
impacts of those regulations on small businesses. Our
complaint is specifically that the PTO does not know, and does not
care, what the effect of its regulations on small business will be,
as required by law, because the PTO has not examined that issue.
We believe that many individual inventors and small businesses may
be frozen out of the patent process by PTO rule changes and by the
actions of Congress.
What we have done about the problem.
The following is a brief chronology of our activities relating to PTO rulemakings and bills before Congress. Members of the Pennsylvania IP Forum have been unstinting in their efforts, all without pay, in pursuing these matters. We extend a special recognition to Legislation Committee Chair Deborah Logan and Government Relations Committee Chair Stuart Bowie for their tireless work relating to the failure by the PTO to comply with the Regulatory Flexibility Act.
1.
“Changes to Support Implementation of the
United States Patent and Trademark Office 21st Century Strategic
Plan,” 68 Fed. Reg. 53816 – 53859 (September 12, 2003)
The
21st
Century Strategic Plan rulemaking addressed many provisions of
the patenting regulations. Upon review, we were concerned that
many of the proposed changes were not in the interests of individual
inventors and small businesses. We prepared and submitted
comments to the rulemaking, which appear
here in pdf format and
here in html. A primary concern, which continues to this
day, is the tendency of the PTO to rely on inflexible rules to push
more of the burden of patent examination onto the applicant,
increasing the cost to the applicant.
The final rule was published at
69
Fed. Reg. 56481
(September 21, 2004). In promulgating the final regulations, the
PTO adopted some of our recommendations and rejected others.
2.
Failure by the PTO to comply with the
Regulatory Flexibility Act, 5 U.S.C. §601-612
The Regulatory Flexibility Act, 5 U.S.C. 601-612, requires that the
PTO analyze whether each proposed rulemaking will affect a
significant number of small businesses, evaluate alternatives and
publish the factual basis of its determination. As we reviewed the
21st Century Strategic Plan and three other related rulemakings,
we were alarmed that the PTO had utterly failed to comply with the
Regulatory Flexibility Act. The PTO did not know and appeared
not to care about the effect of its rulemakings on small business.
We found after reviewing several PTO rulemakings that the PTO
routinely certified that its rulemakings would have no significant
effect on small business, even though the PTO had no factual basis
on which to base its certification.
In early 2004, we submitted FOIA requests to the PTO for
all information to support its findings of no impact on small
businesses of the 21st Century Strategic Plan rulemakings. The
initial PTO responses are attached to
this
letter. Supplemental FOIA responses appear
here
and
here. We were not satisfied by the responses.
We brought our concerns to the attention of the PTO.
Follow this
link to our letter
to Jon Dudas of March 17, 2004 in pdf and this link to our
letter
in html. Because oversight of the PTO is within the
purview of the Senate Committee on the Judiciary, on March 17, 2004
we submitted a
letter
to Sen. Orrin G. Hatch, then-Chairman of the Committee, and
other members of the committee. Follow this
link
to our letter to Sen. Hatch in pdf format and this
link to our
letter to Sen. Hatch in html. We also scheduled to meet with
Thomas Sydnor, Counsel to the Senate Committee on March 24, 2004 to
express our concerns in person.
As a result of our letters and the scheduled meeting, PTO senior staff scheduled a conference telephone call with us to discuss our concerns about PTO Regulatory Flexibility Act compliance. The conference call was conducted on March 23, 2004. A memo discussing the telephone call appears here.
On March 24, 2004, we travelled to Washington and met with
Tom Sydnor, Counsel to the Senate Committee on the Judiciary.
We expressed our concerns about the PTO’s Regulatory Flexibility Act
compliance and about the then-pending patent fee legislation,
discussed below.
Bernard Knight, the PTO attorney who prepared the original
certificates of no impact on small business, prepared a letter
addressing the conference call and dated March 24, 2004, which
appears
here. We did not agree with Mr. Knight’s
characterization of the conference call. Our response of April
5, 2004 appears
here in pdf and
here in
html.
On April 6, 2004, we notified members of the relevant
House and Senate Committees of our continuing concerns and that
those concerns were not allayed by the conference call or by the
resulting FOIA response. Our submission to the committee
members appears
here.
We were not successful in forcing compliance by the PTO
with the Regulatory Flexibility Act for the four rulemakings in
question; however, we were successful in brining this issue to the
attention of the highest officials in the PTO, the SBA and the
relevant Congressional committees. Our actions are bearing
fruit. In
at
least one recent rulemaking, the PTO is at least going through
the motions of Regulatory Flexibility Act compliance.
3.
Patent Fee Legislation, H.R. 1561 (2004)
In 2004, Congress passed
fee legislation
substantially increasing the fees for patenting while at the same
time allowing money to be siphoned from fees collected by the PTO
into the general fund. We were, and are, of the opinion that
the fee increases disproportionately affect small businesses.
We believe that the increased fees discourage small businesses and
individual inventors from pursuing patent protection.
We submitted
written
comment to the fee legislation
to Sen. Orrin G. Hatch and to other members of the Senate and House
committees. Follow this
link to our March 17, 2004 letter to Sen. Hatch in pdf format
and this
link to our
letter to Sen. Hatch in html. As a group, we travelled to
Washington and
met with Tom Sydnor, a senior staffer to the committee on March
24, 2004. During the meeting, we presented our concerns about
the effect of the fee bill in addition to our concerns about the
failure of the PTO to conform to the Regulatory Flexibility Act.
4. "Exemption to Prohibition on Circumvention of
Copyright Protection Systems for Access Control Technologies," 70
Fed. Reg. 57526-57531 (October 3, 2005)
5.
“Changes to Practice in the Examination in
Patent Cases,” 71 Fed. Reg. 61 (January 3, 2006) (“Claim limitation
rulemaking”)
This
rulemaking
would limit the number of claims that can be included in a patent
application without triggering very expensive requirements. We
were concerned that the rulemaking would substantially increase
costs for small businesses and individual inventors, would make
patents more difficult to obtain, and would severely limit the
options available to inventors.
We also were concerned that the PTO had not considered the
effects of the proposed rulemaking on small business under the
Regulatory Flexibility Act. We submitted a
FOIA request, the response to which appears
here. Our comments to the rulemaking appear
here in pdf
format and
here in html. See the comments for a more detailed list of
our concerns.
The rulemaking was finally
promulgated to go into effect on November 1, 2007. The
rulemaking was subsequently challenged by others in court as outside
of the power of the PTO. The challengers prevailed and
implementation of the rulemaking was permanently enjoined by
the court.
6.
“Changes to Practice for Continuing
Applications…,” 71 Fed. Reg. 48 (January 3, 2006) (“Continuation
rulemaking”)
This
rulemaking would limit the number of continuation applications
that can be filed in a patent application or a related family of
patent applications. We were concerned that the rulemaking
would substantially increase costs for small businesses and
individual inventors and would reduce the ability of small
businesses to protect inventions through patents.
We also were concerned that the PTO had not considered the effects of the proposed rulemaking on small businesses under the Regulatory Flexibility Act. We submitted a FOIA request, the response to which appears here. Our comments to the rulemaking appear here in pdf. Our comments are here in html, without attachments.
The PTO finally promulgated the
regulations effective November 1, 2007. On April 1, 2008
the claim limitation and continuation limitation regulations were
struck
down as outside the power of the PTO.
The failure of the PTO Claim limitation and continuation rulemakings apparently is the first time that a PTO rulemaking has been challenged in court and the first time that the PTO has lost a rulemaking. The PTO appears to be learning from its mistakes. In at least one subsequent rulemaking (relating to claiming in the alternative) the PTO is at least going through the motions of Regulatory Flexibility Act compliance.
7. Nomination of Stuart Bowie to the Citizen's Advisory Committee
In 2007 the PTO advertised for participants in its public
advisory committee. We
nominated our Government Relations Chairman, Stuart Bowie.
Our nomination was
not accepted. Their loss.
8. Deferred examination proposal
9. Patent Reform Act of 2009
Congress is considering sweeping changes
to the patent statute, now an annual occurrence. The proposed
Patent Reform Act of 2009 is part of the steady
effort by the
oft-sued high tech industry and the generic pharmaceutical industry
to weaken U.S. patent protection.
